[Editor's note — The BASE-affiliated seafood auction located on Fisherman's Wharf in Gloucester referenced in this article is owned and operated by Vito Giacalone's sons. Mr. Giacalone neither owns, nor operates the business.]
SEAFOODNEWS.COM by John Sackton – Feb 5, 2013 — Last August, the Gloucester Fishing Community Preservation Fund (GFCPF) hired former Mass. Attorney General Scott Harshbarger to conduct an independent review of allegations of conflicts of interest and other charges against Vito Giacalone and other board members of the GFCPF and the Northeast Fisheries Coalition. These charges of possible wrong doing had reached the Massachusetts legislature and the state attorney general's office.
The allegations, fanned by letters and stories in the Gloucester Times, implied that Vito Giacalone, a board member of GFCPF, and of the Northeast Seafood Coalition, and also the operator of the Gloucester auction on Fisherman's Wharf, used his positions to unfairly influence fishermen to do business with him. The critics also charged that the way in which the GFCPF provided leases was tainted by insider dealings, nepotism, and other practices.
The report totally exonerated Giacalone and the GFCPF. Further it found the allegations to be from a small group of people, primarily associated with Larry Ciulla, the former operator of the Rival Seafood Display Auction which has now been sold.
The 45-page report is the result of an exhaustive, four-month investigation by Proskauer Senior Counsel Scott Harshbarger. The inquiry found no convincing evidence in support of allegations that board members of the Gloucester Fishing Community Preservation Fund violated their fiduciary duty to the fishermen of Gloucester, failed to adhere to charitable governance rules or engaged in alleged unfair, deceptive and untoward business practices.
Our investigation found that there is simply no credible basis to support the allegations. To the contrary, they are without merit, said Mr. Harshbarger, who is a former Massachusetts Attorney General.
Based on the investigation of the facts, the report found:
No violations of the fiduciary duties of care, loyalty and independence by any board member
No failure on the part of the board to adhere to accepted charitable governance and operational policies and procedures
No reasonable or credible factual basis on which to conclude that any members of the board obtained an unfair business advantage, took kickbacks, engaged in collusion or in any way engaged in conduct constituting a conflict of interest.
Despite the findings, the report recommended a package of governance improvements to help it avoid similar future allegations. Among the improvements are expanding the funds board members, publishing details of how fishing permits are allocated and reviewing its process for qualifying fishermen.
The Board of the GFCPF adopted these recommendations unanimously. 'We are pleased with the results of this review, we are glad we took the proactive steps to clear our name and hope the community joins us in moving on to focus exclusively on the unfolding disaster facing our historic fishing community.'
'Knowing how important this fund is to the survival of Gloucester's fishing heritage, we felt we had to take this substantial step. We are pleased with the results of this review and we've not only voted to accept the findings but to embrace the common sense governance recommendations. These recommendations provide our organization with a roadmap for maturing the organization and to protecting the important work the Fund has become known for.'
The details of the report show that the allegations were in fact the work of a small group of people in Gloucester who were attempting to smear Vito Giacalone because he was opening an auction that competed with the primary existing auction, the Gloucester Display Auction, run by Larry Ciulla and his family.
in the report, made available by the GFCPF, Proskauer said:
'Led by Attorney Muniz, the Funds critics set forth a variety of allegations, ranging from Giacalone luring fishermen to Fisherman's Wharf with the promise of additional quota, to lower quota prices for friends of the Fund, to allegations of kickbacks and cartel-like business relationships with Richard and Ray Canastra and Carlos Rafael. These allegations go far beyond mere allegations of a perception of conflict which were raised by self-proclaimed friends of the Fund, Senator Tarr and Rep. Ferrante, both of whom repeatedly praised the Fund, its impact and leadership, in spite of the undefined concerns about appearances they apparently heard.'
'According to multiple sources, Muniz's allegations were triggered initially by Larry Ciulla, the former owner of the Gloucester Seafood Display Auction, and one of Muniz's clients. The Gloucester Seafood Display Auction was the only auction in Gloucester prior to the opening of Fisherman's Wharf a fish auction run by Giacalone's sons, but owned by the Canastras. Ciulla alleged that Giacalone, through his control of the Fund, funneled business away from Ciulla's auction to his sons. Ciulla and Muniz, his attorney, launched these criticisms as early as 2008 or 2009 to the Department of Environmental Protection, the Attorney Generals Office and in direct negotiations with the Fund itself. To date, based on our investigation, we have found no credible factual basis for the Ciulla or Muniz complaints.'
When first interviewed by the Proskauer team, Muniz clearly stated that he had no client, nor was he speaking with us on behalf of any particular person, but rather came to us proactively on behalf of concerned fishermen in Gloucester, most of whom he indicated did not want to be identified. He specifically stated that he no longer represents Ciulla. When [one of our attorneys] Long questioned Muniz, he admitted that he represented Ciulla.'
'It turns out that Ciulla is a longtime client of Muniz, and Muniz has been entrenched in various legal battles on behalf of various members of the Gloucester community over the years, and has contributed to articles written in The Gloucester Daily Times. Muniz is now actively representing Cuilla, though he denied such representation at our first meeting with him.'
Our investigation revealed that many of these concerned individuals are fishermen who sold their permits prematurely against the advice of the Fund, have never been part of the sector system, or have suffered from significant ongoing emotional and financial difficulties due to changes in the regulatory landscape.
The unambiguous findings by the former attorney general should put this issue about conflict of interest and the operation of the fund to bed once and for all. The upshot is that the Community Preservation Fund, and specifically Giacalone, are doing exactly what they say they are doing – working in a devoted and comprehensive way to build up and preserve the Gloucester Fishing industry.
Mr. Harshbarger has briefed Massachusetts Attorney General Martha Coakley's office, community leaders and many in the fishing industry on the investigation and the reports findings.
SEAFOODNEWS.COM is a subscription service. This article is republished on Saving Seafood with permission.
Read the independent review here